The age question looms over America’s bosses

US President Joe Biden. Knowing when to step back is often hard for ambitious people who have spent their lives charging ahead. (REUTERS)
US President Joe Biden. Knowing when to step back is often hard for ambitious people who have spent their lives charging ahead. (REUTERS)

Summary

Leadership and aging were urgent issues for American companies even before President Biden’s halting debate performance

It’s time to confront an urgent question: Am I the leader I used to be?

The risk of avoiding this question is playing out in Washington right now. And while the fate of the free world might not rest on the answer for most of us, the futures of our companies and co-workers just might.

If an honest assessment reveals a lost step, it might mean making small adjustments such as cutting back hours. Or it could require handing over the reins. The worst course of action is doing nothing.

Leadership and cognitive decline are pressing issues throughout America’s aging workforce. High-powered professionals increasingly work past traditional retirement ages, even as ageism pushes others to leave careers early. There will be twice as many workers 75 and older in 2030 as there were in 2020, the Bureau of Labor Statistics projects.

And these aren’t just rank-and-file workers; they are the people running companies. More than half of private businesses in the U.S. are owned by people over 55, according to research by Project Equity, a nonprofit that advocates for employee ownership in corporate succession plans.

Himanshu Palsule, chief executive of the professional-development firm Cornerstone, used to fly overnight to Bengaluru, India, check into his hotel for a morning shower, then report to his company’s satellite office for a full day of work with virtually no sleep.

Now such a grueling itinerary would wipe him out.

The 60-year-old Palsule says he’s unwilling to invite the chatter that would ensue if he dozed off in a meeting or made a verbal gaffe. So, he now starts international trips a day early to get proper shut-eye and naps as needed to combat jet lag.

The strategy helps him perform better and ensures there’s no reason to wonder whether he’s up to the job.

“If someone fumbles or stumbles when trying to recall a fact, immediately there are questions about cognitive issues," he says of the scrutiny around executives.

Leading or leaving

Knowing when to step back is often hard for ambitious people who have spent their lives charging ahead.

The late Supreme Court Justice Sandra Day O’Connor appeared to pull it off better than most. O’Connor, who revealed in 2018 that she had dementia, seemed sound as ever when she announced her retirement in 2005 at age 75.

The drama that surrounded oil and construction magnate Pat Bowlen, better known as the longtime owner of the NFL’s Denver Broncos, highlights the pitfalls of holding on.

Bowlen had Alzheimer’s disease for several years before he relinquished day-to-day decision-making and placed the team in a trust in 2014, according to his wife and brother. A legal dispute that centered on Bowlen’s wherewithal when he appointed nonfamily members as trustees led to the Broncos’ sale in 2022, three years after his death.

The stakes are high when a leader starts to slip, which is why it’s critical to have people within a company who can intervene before it’s too late, says Hubert Joly, a former Best Buy CEO who sits on the boards of Johnson & Johnson and Ralph Lauren.

He recalls one instance where he felt compelled to ask what was going on with a fellow board member who wasn’t his usual self. Joly’s gentle probing led his colleague to disclose a serious health condition that affected his performance. With treatment, the person returned to normal.

Ideally, executives call time on themselves.

Joly says that’s what happened when Ralph Lauren transitioned from CEO to executive chairman and chief creative officer of his apparel company in 2015 at age 75. Directors never had to have an awkward exit conversation with Lauren, who remains active in the business to this day, according to Joly. But they would have been obligated if the founder had faltered and refused to recognize it.

Joly says that’s what happened when Ralph Lauren transitioned from CEO to executive chairman and chief creative officer of his apparel company in 2015 at age 75. Directors never had to have an awkward exit conversation with Lauren, who remains active in the business to this day, according to Joly. But they would have been obligated if the founder had faltered and refused to recognize it.

“The board is there to supervise, and even if the company is Ralph Lauren and his name is on the building, you can still have very respectful dialogues," Joly says.

Handing over

Artificial-intelligence tools in development at academic laboratories from Boston to San Francisco aim to detect, and even predict, mental slippage years in advance. For now, board members, spouses and confidantes are typically among the few who can tell an executive it’s time to move on.

At small private or family-run businesses, handing over is especially fraught because there is less oversight—and often more emotion—than in public companies. And succession planning often takes longer than people expect, says Scott Snider, president of the Exit Planning Institute, which has about 7,000 advisers in the U.S. who help businesses prepare for new chapters.

Arthur Brooks, author of “From Strength to Strength," a bestselling book about the second half of life, suggests starting before someone else tells you to.

“Stepping back requires planning and careful thought so you aren’t the last one to see writing on the wall, at which point it can be bitter and destructive," he says. “Plan to leave before you have to, with a little left in the tank."

Julie Charlestein, the fourth-generation CEO of Premier Dental Products in Plymouth Meeting, Pa., says it took years to hammer out a succession plan before she ultimately took over for her father in 2016. She was head of the company’s business-development division when talks began. Agreeing on an ownership structure was complicated, with children and grandchildren to consider.

“It involved a lot of negotiations—a lot of difficulty, quite honestly—and a lot of differences of opinion," she says.

She declined her dad’s initial offer to make her president, while he remained CEO, because it felt like a promotion in title alone. She later agreed to become president with a more robust job description and is now president and CEO.

Her changes to the company include creating a board of directors made up of nonfamily members. Charlestein, 52, says she wants straight talkers to give advice, hold her accountable and, if necessary someday, nudge her toward the door.

Write to Callum Borchers at callum.borchers@wsj.com

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